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July 1, 2014

blogger - 2009 Downturn and Beyond

With a positive outlook for the next upcoming years in boat building, how did the various countries and boat builders handle the downturn which went on from 2009 till 2012 and 2013 being more or less a flat year. I will put here a personal perspective how the main production, semi-custom leisure boat building countries handled the largest recession since the depression of the nineteen thirties.

Britain and its main builders have had an interesting build up with a turbulent background story behind. The three British builders have in reality changed ownership with the best move coming from Princess who was purchased by a French finance mostly involved in fashion at the start of the crisis. Sunseeker and Fairline both had a weak period with the first nearly going down, and purchased by a Chinese businessman in Summer 2013. Whats interesting in all this that while the background was rough, the British boat builders increased an impressive amount of brand recognition in the general public eyes, thanks to one of the best price value ratio in the industry and a global network. Another known British builder Sealine did not manage to save itself, and ended up moving production in Germany and now being Hanse owned.

The country in producing most boats in the World, the United States of America had a similar picture of what happened in the early nineties in the midst of the luxury tax. But this time around instead of large boat builders buying smaller ones and becoming groups, we had for the most part financial houses coming in. The North American continent is always an interesting varied market but the main problem seems that most companies seems to over produce, and also lack brand building. Its interesting to see that most US builders stop at about 50 feet max length, a maximum size they had a decade ago and never expanded over this. Still the USA has the best examples to follow how to handle a downturn, with Viking and the custom sportfish boat builders of the East emerging stronger then ever after the recession was over. The interesting part is that these builders are all family owned with a huge drive coming from passion.

Italy had a depressing story, and while the recession did its damage, the biggest hit to most builders in the shoe shaped peninsula especially those dependent on the home market came from within thanks to a suicide political move which left all losers. Italy has always been about those small medium sized builders which build for the most part about twenty boats a year. But even global giant Azimut Benetti Group still a family owned corporate and the largest super yacht builder of 24 meters plus for nearly two decades felt a few cracks here and there. The other giant Ferretti Group and its brands had trouble for the most part of the own making, saved by the banks and then bought for 75% by a Chinese businessmen. Those financial houses always pull the ropes when the weather gets rough. A company which came out stronger from this downturn was Absolute a fairly young brand founded in 2002, but with Gobbi being an experienced since 1960 boat builder at the helm. Today Absolute along with Azimut-Atlantis is the Italian answer to the British trio in production boat building. At the moment a shy turn around is happening in Italy and some of the small medium sized builders which closed there doors are trying to open up again. But after all that damage most small and semi custom builders will have a difficult task competing with what the Dutch builders are offering. The picture in Italy back in 2011 was also more tragic when one considers that as at 2007 it was the largest boat selling market in Europe thanks to the leasing schemes in operation at the time.

The Dutch shown how they are ready to compete in this market, but what impressed the most was that they have shown a huge capability in making group and going to boat shows together, under one flag. This has created a new identity to Dutch smaller size builders, with some not much known names becoming the new thing to be.

The rest was an interesting story, when you think France the Beneteau Group comes to mind, and the French giant in the recession has all been about expanding and taking new market shares. Spain had a terrible crisis, among the worst in Europe and most small medium sized builders who cropped up during the boom period, did disappear during the recession, that is apart Astondoa who still continued to grow, expand and invest, helped by its sea based yard which can also carry refit projects. Down under Australian builders, had also an interesting expansion and while Riviera was in receivership period for a year or so the company actually came out stronger from these dark times, and along with the USA Sea Ray and Tiara is an interesting competitor to the known European quality brands.